Process of Filing for Bankruptcy
Bankruptcy is just about the last straw option which a company can legally do when it is heavily in debt. When your company is in this particular condition, you will be on safe ground if you consider first to seek legal advice on a bankruptcy lawyer who can provide you options on which legal course to take before even considering filing for bankruptcy.
Bankruptcy is a legal process of permitting businesses or consumers to repay all or some of their debts under the guidance and protection of the court. There are two types of bankruptcy, liquidation and reorganization, which is legally considered depending on the nature of the debt problem of the business.
It is always advisable to hire a bankruptcy lawyer so that he/she can study your income, debts and assets and provide you what options to consider, such that bankruptcy should be the least of these considerations.
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Before considering on filing for bankruptcy, a good bankruptcy lawyer should come up with a contingency, payment plan that is within your means and that can assure your creditors and, thereby, can prevent further harassment from your creditors due the late payments. By doing this, most creditors will be pleased to note that an effort is being done and in good faith, as it is being presented by a bankruptcy lawyer and doing this before resorting to bankruptcy.
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When the payment plan is not possible than the bankruptcy lawyer will take the course of action to advise you to file for insolvency, recommend the type of bankruptcy to file, and provide a job contract to work on this. When you have finally understood and have decided to file for insolvency, your lawyer will familiarize you on the different types of bankruptcy and which of these to file for.
If the lawyer advises to file for liquidation, there are two options to take which is following Chapter 7 or Chapter 13 of the Bankruptcy Law. By filing for Chapter 7 the debtor is legally allowed to sell his/her non-exempt properties as exchange payment for his/her debts to the creditors. If Chapter 13 is the advised recourse, this law allows the debtor to keep all of his/her property and repay all or portion of his/her debt to the creditors over a period of 3 to 5 years. Once Chapter 7 or 13 is granted by the court, an appointed trustee is hired to oversee the payments or liquidation of the assets.
Chapter 11 is filed for if the lawyer sees that the company is still viable so that the law will permit for a reorganization of the debt load to allow the company to stay in business.
So you can resolve your financial problems, legally and capably, it is always best to leave this job worked out by a bankruptcy lawyer. By leaving it to a competent bankruptcy lawyer, you now are given a new lease in life to chart on.